Mon. Jul 15th, 2024

The United States Department of Justice and a coalition of state attorneys general will start a blockbuster antitrust trial in Washington, DC, alleging that Alphabet’s Google unlawfully abused its dominance in the search engine market to maintain monopoly power.

Here is an explainer on the key issues in the case:

What is the trial about?

The Justice Department and 52 attorneys general representing US states or territories say Google unfairly forged its domination of online search by paying billions of dollars to Apple and other business partners to ensure its search engine would be the default on most phones and browsers.

The government’s lawsuit, filed in 2020 in federal court, alleges these deals were intended by Google to be “exclusionary”, denying rivals access to search queries and clicks, and allowing Google to entrench its market dominance.

Google has grabbed a 90 percent market share in search in the US in recent years, according to government estimates.

The government said the browser agreements – steering billions of web queries to Google every day – have resulted in less choice for consumers and less innovation.

What is Google saying in its defence?

Google maintains it did not violate antitrust law. It said in a January court filing that its browser agreements were “legitimate competition” and not “illicit exclusion”.

The agreements did not prevent rivals from developing their own search engines or stop companies such as Apple and Mozilla from promoting them, Google argues.

Rather, the makers of phones and web browsers set Google search as their default because they wanted to deliver the “highest quality” experience for their customers, Google claimed in its January filing.

Google also claims mobile users can switch easily if they want to use another search engine.

“People don’t use Google because they have to – they use it because they want to,” said Kent Walker, Google president of global affairs, in a blog post.

What does the law say?

It is generally not illegal for a business to make an arrangement with one customer that excludes others.

Such exclusive deals are common and do not garner much regulatory scrutiny when a company lacking market power cannot meaningfully affect competition.

But exclusive deals can violate antitrust law if a company is so big or powerful that it prevents rivals from entering the market, and cannot prove that its curbs on industry competition are outweighed by a positive effect on consumers.

The Justice Department has the burden to show that Google’s business deals harmed competition for search. Google will have its own chance at the non-jury trial, after the government makes its case, to argue that its deals benefit consumers.

What happens if Google loses?

The US and state allies are not seeking a monetary penalty, but rather an injunction barring Google from continuing the alleged anticompetitive practices.

Such an order could have significant business implications for Google. For example, the government said in its lawsuit that the court could break up the company as a fix.

More broadly, the Justice Department may argue that it wants to stop Google from leveraging its alleged search monopoly to make exclusive deals in newly emerging markets, including artificial intelligence.

The trial at the US District Court for the District of Columbia is expected to last about 10 weeks. The judge would not be expected to rule until sometime in 2024.

Who is presiding over the case?

US District Judge Amit Mehta was appointed to the bench in 2014 by then-President Barack Obama after a career as a private lawyer in Washington.

He has overseen several major antitrust disputes.

In 2015, Mehta blocked Sysco Corp’s $3.5bn merger with US Foods. He recently presided over the trial of Peter Navarro, the former Donald Trump adviser who was convicted on September 7 of contempt of Congress.

In May, Mehta sentenced Oath Keepers founder Stewart Rhodes to 18 years in prison for his role in the January 6, 2021, assault on the US Capitol.

Has Google lost cases in the past?

The European Union fined Google $1.7bn in 2019 for stopping websites from using Google’s rivals to find advertisers, $2.6bn in 2017 for favouring its own shopping business in search, and $4.9bn in 2018 for blocking rivals on its wireless Android operating system.

Source link

By Joy

Leave a Reply

Your email address will not be published. Required fields are marked *